Tuesday, September 29, 2009

The Australian Government general government sector recorded an underlying cash deficit of $27.1 billion (2.3 per cent of GDP) for 2008-09. This outcome was $5.0 billion better than expected at the time of the 2009‑10 Budget, reflecting lower than anticipated spending of $2.2 billion and higher cash receipts of $2.8 billion.

Total tax receipts were $3.3 billion above the estimate at the 2009‑10 Budget, primarily due to stronger than expected company income tax receipts of $3.6 billion, partly offset by lower than expected personal income tax receipts of $0.5 billion.

Lower spending was due to a number of one-off factors, as well as lower income-support payments, including a reduction in payments of $138 million for the Newstart Allowance. This outcome reflects in part the success of our economic stimulus which has meant more Australians in jobs and fewer Australians collecting unemployment benefits than would otherwise be the case.

The stronger budget outcome is also reflected in a significant improvement in the expected Australian Government net debt position. At the end of 2008-09, the level of Australian Government net debt was -$16.1 billion, which is $11.5 billion better than expected at the time of the 2009-10 Budget.

The Government is fully committed to its fiscal strategy to return the budget to surplus as the global economy recovers.

The last bit's the kicker. You wait. From here on, we're about to learn what austerity means. And the Coalition won't be able to complain - they're been asking for it.